Completion Of Necessary Land Purchases Lets Emed Mining Inch Towards Restart Of Rio Tinto Mine

EMED Mining continues to inch towards restarting the Rio Tinto copper mine in Spain

after it agreed a ?5 million purchase of the last remaining land plot needed. This land covers part of the mine's main tailings dam wall and is being acquired from part of an Andalucian investment group, Inland Trading.

The consideration will be satisfied as follows: EUR 1 million has been paid in cash on execution of the deal; 1.5 million will be paid in cash in eight equal instalments over a period of 24 months; and EUR 2.5 million will be satisfied by the allotment of 18.5 million new ordinary shares at approximately 10.61p per share (subject to approval by the Toronto Stock Exchange).

In addition, EMED has been granted options by Inland and Construcciones Zeitung to acquire additional plots of land in the surrounding district, exercisable within four years at an aggregate price of EUR 9 million. The option lands are of interest to EMED because of the scale of potential expansion of operations in the longer term.

EMED's managing director, Harry Anagnostaras-Adams, commented: "The agreements with Inland and Zeitung fulfil our project's land ownership and access requirements and aligns the interests of those parties with those of our company, as recently done with the major neighbouring landowner Rumbo 5-Cero SL.

"We now turn all our focus onto satisfying the regulatory requirements so as to be able to complete our project planning. We aim to trigger the project restart at the end of this year, duly permitted, engineered and financed and to then implement planned works including personnel training and recruitment.

"Of equal importance to the preparations for production will be the implementation of a drilling programme targeting to increase resources and reserves on the first mine, the Cerro Colorado open pit, as well as to validate historical data on other deposits with a view to estimating mineral resources in compliance with today's reporting standards."

Completion of the necessary land acquisitions is the latest milestone in the drawn-out restart of the Rio Tinto mine. EMED continues to target the end of 2013 for the start of production commissioning at the mine. EMED confirmed in July that the Andalucian Government regulatory procedures remain on track with the key approvals of the project restart being processed during the current quarter in terms of the environmental plans, following public comment, and project plans, following a review by the national technical agencies.

The project and construction management team has been mobilised to site and expects to have a definitive project execution plan ready before the end of 2012 to enable the finalisation of procurement and financing agreements.

Product marketing arrangements have been agreed with cornerstone customers who are also participating in the project financing, namely Goldman Sachs International and Xiangguang International.

Importantly, project planning has identified a number of opportunities to expand production beyond the base case of 37,000 tonnes per annum copper-in-concentrate sales. Relevant studies will be initiated on the following aspects once the project restart has triggered.

First, to increase ore reserves from the currently reported 123 million tonnes to a target of around 200 million tonnes by seeking to convert more of the existing resources to reserves and through further reserve discovery work, which will include:

1) In-fill drilling aimed at enabling additional resources to be converted into reserves;

2) Step-out drilling adjacent to the pit to delineate additional resources and reserves; and

3) Review of the tailings deposition method to optimise holding capacity of the land footprint.

In addition, EMED will look to increase ore processing capacity beyond the base case of 9 million tonnes per annum.

The company has also formed a joint venture to examine the potential for reprocessing tailings at Rio Tinto.

by: Martin Li

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